When you start a new job, your employer may hand you paperwork to review and sign, including a non-competition, non-solicitation, or confidentiality agreement.  Some agreements may carry post-employment restrictions.  This can have serious implications when you are looking to change positions. Valid non-competition agreements can restrict what positions you may hold in the future.  In addition, non-solicitation agreements limit who you can do business with following the cessation of your employment.  Confidentiality or non-disclosure agreements restrict what type of information you may share regarding your employer.

In October of 2018, Massachusetts passed a new law which placed requirements and restrictions on non-competition agreements.  The 2018 changes only governs non-competition agreements entered into on or after October 1, 2018.  Non-competition agreements do not include non-solicitation agreements, non-disclosure agreements, or confidentiality agreements.

Post October 2018 Non-competition agreements must comply with the following:

• They have to be in writing and signed by the employee and employer.
• The agreement has to set forth that the employee has the right to consult with an attorney prior to singing the agreement.
• Non-competition agreements must be given with the formal offer of employment or 10 business days before the employee starts working – whichever is earlier.
• If an employee signs a non-competition agreement after employment has already commenced, the company must provide “fair and reasonable consideration” (e., some compensation), along with 10 days’ notice before the effective date. As with non-competition agreements provided prior to employment, the agreement has to be signed and contain the provision that the employee has the right to consult with an attorney.
• The agreement cannot be broader than necessary and must be designed to protect trade secrets, confidential information, and/or goodwill of the company.
• Non-competition agreements can only last for 12 months from the last date of employment (unless exceptions exist).
• Non-competition agreements are limited in geographic scope.
• Non-competition agreements now must contain a garden leave clause or other “mutually-agreed upon consideration” If the employer wants to enforce the agreement.
• Agreements must comply with public policy.

In addition, the following types of employees cannot sign valid non-competition agreements:

• An employee who is classified as nonexempt under the FLSA;
• Graduate or undergraduate students who engage in short-term employment/internship (whether paid or not paid) while enrolled full-time or part-time in school; and
• Employees age 18 or younger.

Keep in mind non-competition agreements are different from non-solicitation and non-disclosure/confidentiality agreements.  Employees may still be required to sign non-solicitation and/or confidentiality agreements which prohibit employees from (i) sharing confidential company or business information; (ii) soliciting clients, customers, or prospective customers; and (iii) soliciting employees.   Non-solicitation agreements and non-disclosure/confidentiality agreements do not require additional garden leave.

At the Harbor Law Group, we assist and counsel individuals who are presented with agreements which contain restrictive covenants.  We help them understand the terms of the agreements and assist with suggesting potential revisions to employers.  In addition, we meet with individuals who are looking to secure employment elsewhere but are concerned about post-termination restrictions.